The benchmark Shanghai Composite Index surged 2.68 percent or 71.97 points to close at 2,754.36 points, boosted by the strong performance of non-bank financial names and information technology companies.

The smaller Shenzhen Component Index rallied by 3.95 percent to close at 8,446.92 points, while the Nasdaq-style ChiNext enterprise board surged by 4.11 percent to end at 1,413.60 points.

The A-share market saw more than 100 shares recording the biggest daily rise, with a combined turnover of 547.7 billion yuan (US$81.01 billion), up from 418.3 billion yuan the previous trading day.

Dongxing Securities saw its shares rise by the daily limit of 10 percent to end at 11.32 yuan per share.

The rally came after the news that trade talks between the US and China are set to continue in Washington this week, after the two parities were reported to have made steady and methodical progress on both core and subsidiary issues in negotiations recently concluded in Beijing.

The two countries are both motivated to negotiate due to the economic pain from tariffs imposed by both sides, Ethan Harris, head of global economics research at Bank of America Merrill Lynch, was quoted as saying by Xinhua news agency.

Analysts said investors sentiment is now being lifted by positive factors such as the progress of the Sino-US trade talks and the continuous inflow of foreign capital to the Chinese stock market as well as favorable policies from the central government.